The new head of Avaya Inc.’s networking division has bold goals for a company that by all accounts is at least in fourth place in global network sales if not lower.
“Two years from now I’d like to be the number three networking company in the world,” Marc Randall, senior vice-president of networking for the company, said in an interview Tuesday.
“Lofty goals,” he admits, “but I’ve got my sights on the competitors ahead of me. And they’re big.”
But, he added, “it’s also an Avaya goal to grow the business. And as we grow our collaboration business, our networking business should grow along side with it.”
That won’t be easy, according to industry analysts.
Despite buying the enterprise networking division of Nortel Networks for almost $1 billion and spending another $165 million to upgrade the R&D labs it inherited in Ontario, Avaya has been unable to make ground on Cisco Systems Inc., Juniper Networks Inc., Alcatel-Lucent, Hewlett-Packard Co. and Brocade Communications Systems Inc. in networking equipment sales.
“When people think of Avaya they don’t think of networking,” observed Andre Kindness, enterprise networking analyst at Forrester Research. Avaya is still best known for its unified communications solutions and has no trouble selling them. But teaming sales of that gear with networking – as Cisco has done – has been a tough goal at Avaya.
“When they first bought Nortel’s equipment they fumbled around, didn’t seem to know what to do with them,” said Kindness. “In the last 18 months they’ve made a big turnaround, investing in the networking side.” While the company is starting to gain customers, “it’s a slow road for them.”
“They’re still struggling on how to sell networking and VoIP together.”
Randall (pictured), who was hired in January from Cisco [Nasdaq: CSCO], where he was vice-president and general manager of its scalable network business unit, acknowledges as much. “We really didn’t take this tact as aggressively as we are now,” he said.
With Randall’s appointment Avaya CEO Kevin Kennedy also trimmed down his company’s senior management structure to three business units in an effort to ensure the divisions worked closer. Brett Shockley became senior vice-president in charge of applications (including unified communications), and Gary Barnett became senior vice-president of collaboration infrastructure.
That fits in with what Randall says he learned at Cisco: “That multiple business units have to collaborate to be successful. Second, that the hardware network business units must collaborate with applications to be successful. That was one of the biggest reasons why I joined Avaya.”
According to Randall, there were isolated groups at Cisco that built wiring closets, top of rack switches and aggregation switches, and applications were something to run on top the network.
But Randall believes that the network has to open the control plan and be “subservient to the application. When an organization turns to voice over IP, video and virtualization applications have to have direct control over network resources, he says. So, for example, an application can reserve network resources based on the priority of the job.
His target is to encourage bundled sales, such as Avaya IP phones connected to an Avaya switch and using the Aura unified communications suite for management; SMB and branch office solutions including switching; remote access solutions and solutions that create what he called “dynamic data centres” with Avaya top of rack switches and its VENA virtualized network architecture.
VENA is a key differentiator from Cisco and Juniper’s fabric, he added, because it is based on the IEEE’s Shortest Path Bridging protocol and not a proprietary standard.
Whether the strategy will work is a question. Randall says that Avaya “reached the bottom of the revenue curve” in the third quarter last year and has had two profitable quarters since.
But Zeus Kerravala, principal of ZK Research notes that the pace of competition among network vendors has “changed a ton” in the past two years. Cisco seems to have recovered from stumbles in 2011, while HP has gained market share by aggressively pricing its Ethernet switches and Huawei Technologies has just entered the North American enterprise switching market.
“Networking share is hard to gain,” he said.
It raises the question of whether Avaya can’t get bigger in networking “You never want to say never,” Kerravala said, but Randall’s “got to bring something unique to the market.”